Reassessment notice must stand on original reasons alone; later-added grounds and an incorrect factual premise invalidate the reopening.

Reassessment proceedings cannot be sustained where the section 148A(b) notice rests on an incorrect factual premise, such as the mistaken assumption that no return was filed, and the transactions were already disclosed in the return. The validity of reassessment must be tested only on the reasons recorded in the original notice and the material then available; those reasons cannot later be expanded by introducing new grounds in the objections stage or in the section 148A(d) order. On that basis, the notice, the order disposing of objections, and the section 148A(d) order were unsustainable, though liberty was left open to proceed afresh in accordance with law if permissible.

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Issues: Whether reassessment proceedings could be sustained when the notice under section 148A(b) proceeded on an incorrect factual premise that the assessee had not filed its return, and when the final order under section 148A(d) relied on new grounds not forming part of the original notice.

Analysis: The notice under section 148A(b) was founded on the assumption that no return had been filed for the relevant assessment year. That premise was incorrect, and the transactions referred to in the notice were already disclosed in the filed return. The reassessment was then sought to be justified on different and additional grounds, including the alleged ineligibility to claim treaty benefit under Article 13(4) of the India-Mauritius Double Taxation Avoidance Agreement and inquiries concerning a scheme-based allotment of shares. Those grounds were not part of the original notice and were introduced later while disposing of objections and passing the order under section 148A(d). The statutory scheme requires that the validity of reassessment be tested on the basis of the reasons contained in the original notice and the material then available, and those reasons cannot be expanded or improved upon later.

Conclusion: The reassessment action was unsustainable because it rested on a defective foundation and impermissible supplementation of reasons, and therefore the challenge succeeded in favour of the assessee.

Final Conclusion: The reassessment notice, the order disposing of objections, and the section 148A(d) order could not be sustained, though liberty was left open to proceed afresh in accordance with law if permissible.

Ratio Decidendi: Reassessment must stand or fall on the reasons recorded in the original notice and the material then available, and subsequent introduction of new grounds or justification is impermissible.

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